Strategic management paper: A business turnaround strategy for Public Securities Corporation

Date of Publication

2005

Document Type

Oral Comprehensive Exam

Degree Name

Master of Business Administration

College

Ramon V. Del Rosario College of Business

Department/Unit

Decision Sciences and Innovation

Abstract/Summary

Public Securities Corporation (PSC), a wholly-owned stock brokerage firm of the AFP Retirement and Separation Benefits System (AFP RSBS) envisions itself to be one of the top stock brokerage firms in the Philippines. The company was acquired by the AFP RSBS from a group of private individuals in 1994 with the main objective of taking advantage of the favorable prospects in the stock market and at the same time, to generate income for the mother company.

Value turnover at the Philippine Stock Exchange slowed by 30% and lost P383 billion from P1.2 trillion in 1997 to P817 billion in 1998 due to the Asian Financial crisis. The decline in value turnover resulted to less commission income generated from broking services that caused both local and foreign brokers to leave the Philippine equities market and applied for temporary suspension, while others opted to cease operations totally, Political instability also discouraged investors in Philippine equities during the Estrada administration. Illegal trading activities, such as front running, insider trading and kiting resulted to the loss of investors' confidence towards the regulatory bodies, the Securities and Exchange Commission and the Philippine Stock Exchange.

This paper presents three frameworks to analyze the effectiveness of the company's current strategy. Among the frameworks employed was PEST Analysis or Political, Economic, Social and Technological Analysis which was used to highlight the impact of economic, political, social and technological factors on the industry. In addition, the driving forces which affect the competitive landscape of the stock brokerage industry were also scrutinized, to wit, regulatory influences and government policy changes, as well as the subsequent departure of major players in the industry. Finally, the Key Success Factors (KSFs) were also used as framework to best explain the ability of certain brokerage firms to remain successful despite unfavorable market conditions. Among the KSFs identified were strong client base, managerial capability, superior workforce talent and access to financial capital.

Current strategic approaches of the company include strengthening of current revenue streams, cost and expense reduction, raising new capital, strengthening its internal controls and risk management functions and empowering its personnel. The author proposed to continue existing strategies while adhering and complying strictly to Corporate Governance. The strict compliance to the rules in corporate governance will guide the company towards the attainment of its vision, mission and strategic objectives.

Among the significant items in corporate governance that the company should focus on are risk management, proper identification of board functions, organizational planning and implementation of budget targets.

It is also deemed that the company considers reformulating its vision and mission statements.

Abstract Format

html

Language

English

Format

Print

Accession Number

OCE1200

Shelf Location

Archives, The Learning Commons, 12F Henry Sy Sr. Hall

Physical Description

90, 12 unnumbered leaves ; 28 cm.

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